According to Odaily, economists from HSBC Global Research have indicated that the Bank of Japan (BOJ) might increase interest rates during its December meeting. Frederic Neumann and Jun Takazawa, economists at the bank, highlighted that recent hawkish comments from officials reflect both currency fluctuations and improvements in economic data. The majority of the BOJ's policy committee members are likely confident that wages will continue to rise broadly next year, prompting a decision to raise rates in December, ahead of any significant events that might occur in January following Trump's inauguration.
Japan's economy and prices remain on a normal trajectory, with progress observed in wages, consumption, and service inflation. HSBC anticipates that the BOJ will implement another rate hike of 25 basis points in the first quarter of 2026, bringing the policy rate to 1%. This outlook suggests a gradual tightening of monetary policy as Japan's economic indicators show signs of improvement, aligning with the central bank's objectives to stabilize the economy and manage inflation effectively.